Iran's regime in 'dire straits' as it faces energy crisis due to sanctions

Industries are forced to shut down due to the grim situation

By Farnaz Fassihi & Leily Nikounazar 

Government offices in Iran are closed or operating at reduced hours. Schools and colleges have moved to online only. Highways and shopping malls have descended into darkness, and industrial plants have been denied power, bringing manufacturing to a near halt.

 

Although Iran has one of the biggest supplies of natural gas and crude oil in the world, it is in a full-blown energy crisis that can be attributed to years of sanctions, mismanagement, aging infrastructure, wasteful consumption, and targeted attacks by Israel.

 

“We are facing very dire imbalances in gas, electricity, energy, water, money and environment,” said President Masoud Pezeshkian in a live televised address to the nation this month. “All of them are at a level that could turn into a crisis.”

 

 

“We must apologise to the people that we are in a situation where they have to bear the brunt,” Pezes­hkian said. “Officials have said the deficit in the amount of gas the country needs to function amounts to about 350 million cubic meters a day, and as temperatures have plunged and demand has spiked, officials have had to resort to extreme measures to ration gas.

The government faced two stark choices. It either had to cut gas service to residential homes or shut down the supply to power plants that generated electricity.

 

It chose the latter, as turning gas off to residential units would come with serious safety hazards and would cut off the primary source of heat for most Iranians.

 

By Friday, 17 power plants had been completely taken off line and the rest were only partially operational.

 

Tavanir, the state power company,  warned producers of everything from steel to glass to food products to medicine that they needed to brace for widespread power cuts that could last days or weeks. The news has sent both state-controlled and private industries into a tailspin.

 

Mehdi Bostanchi, the head of the country’s Coordination Council of Industries, a nationwide body that acts as a liaison between industries and the government, said in an interview from Tehran that the situation was catastrophic and unlike anything industries had ever experienced.

 

He estimated that losses from just this past week could reduce manufacturing in Iran by at least 30 percent to 50 percent and amount to tens of billions of dollars in losses. He said that while no enterprise had been spared, smaller and medium factories were hit the hardest. “Naturally, the damages from the widespread and abrupt power outage that has lasted all week will be extremely serious for industries,” Bostanchi said. 

 

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